LUNA was ultimately created for the one and only purpose of stabilizing the price difference between the issues of stablecoins pegged with fiat currencies of US Dollar, South Korean Won, and Mongolian Tugrik with many other combinations under development. It is made possible by using a burning ecosystem, where an equal amount of burning LUNA tokens can generate UST stablecoins and make it possible to transform stablecoins into LUNA. With the proposed plans of introducing more fiat stablecoins by terra, the ecosystem of LUNA can only be expected to grow exponentially. Terra currently has a total of 1 billion LUNA tokens, with only 346 million under circulation. The percentage of LUNA token burnt is equivalent to the number of UST coins minted.
As of February 2022, we can witness three stablecoin based tokens in the top three cryptocurrencies in terms of market capitalization. Whether or not crypto will replace fiat currencies might be open for discussion, but there is a huge potential in transforming fiat into stablecoins and fast-tracking the payment processes. Moreover, holding a LUNA token allows the holder to be a part of the governance process of the Terra blockchain ecosystem. As per the last consensus data of Feb 2019, there was an existing payments ecosystem of 25 Billion USD using stablecoins with a user base of 45 million customers. Since Terra charges 2-3% in merchant gateway charges, the growth of LUNA is inevitable in the current market scenario.
LUNA Price Analysis
LUNA token has risen more than 1600% from its lows of July 2021 to Dec 2021. Despite falling close to 50% from its highs in January 2022, LUNA is expected to grow as the usage of UST tokens rises. With LUNA taking support from its 200 DMA level of $50, we can expect this trend to continue upwards as per the LUNA price prediction.
Terra (LUNA) has created huge wealth for its investors growing more than 10x in the last six-seven months. With RSI heading upwards and crossing the neutral territory, this token seems to be in a bullish trajectory.